Los Angeles Tax Law Explained

The tax laws differ from state to state. The Los Angeles tax laws are particularly complicated and are enough to baffle anyone. The tax laws are also important because they affect the lives of millions living in the city. Thus, the tax attorney is a very important figure in the realm of the city. A good tax attorney will help you understand your unique situation, give you advice as to how you can minimize the tax payments and defends you in case there is an accusation of tax evasion or fraud leveled against you.

The tax attorney is someone who is well trained in matters of law. The most revered of lawyers have the prestigious LLM degree that is the Master of Law Letters. Many clients prefer the attorneys who have an LLM degree because the notion is that the best lawyers of the city have the LLM. These lawyers supposedly provide the best tax assistance.

The Internal Revenue Service does not apply the partial payments made by businesspersons and organizations in Orange County or Ventura County, California, Los Angeles County or Santa Barbara County before January 1, 2003. The IRS, according to their own convenience, applies the payments to the Trust Fund Recovery Penalty. This partial payment is made on Form 941 tax liability and the IRS accepts the payments in accordance with their own priorities. The IRS also sends the Letter 1153 to the businessperson or the organization.

The IRS acceptance of payment is prioritized. The liability that accompanies the minimum decree of limitations for collections is first in the list of payment applications. That is followed by the one with the next minimum amount of limitations of collection and so on. This method of payment application followed by the IRS does not necessarily mean that the ones impending for the longest time will be taken care of before others. It is just the tax period that has the minimum collection statute that is given top priority.

The IRS sends the Letter 1153 (DO) to a business executive who owes a certain amount to the IRS and has his Trust Fund Recovery Penalty (TFRP). The Letter 1153 (DO) is sent before June 19, 2000. If the business executive receives the letter and has made the partial payment to the IRS by the Form 941 before January 1, 2003, the IRS assesses his partial payment.

When some business executive has made a partial or undesignated payment in a similar manner as described above, the payment will be subject to application to various taxes. First, the payment will be under the non-trust fund part of the tax, then under assessed lien fees and collections, then under assessed penalties for defaulters, followed by assessed interest, accrued penalties and accrued interest. After all this is over, the payment is ultimately assessed to the trust fund segment of the tax under the IRS.